August 5, 2011


HlibInvestbud to increase exports to five million tonnes



In spite of competition from Russia following the lifting of an export ban, Ukrainian grain trader HlibInvestbud (HIB) said on Thursday (Aug 4) it intended to raise exports by 300% to five million tonnes in 2011/12.


HIB emerged as one Ukraine's major grain traders last summer when it secured the lion's share of exports quotas introduced after a drought. The government has a 49% stake in the company and 51% is owned by private investors.


The company won more than 20% of last season's total grain export quotas of 4.2 million tonnes and sold 1.2 million tonnes of grain abroad.


"We plan to export about five million tonnes, taking into account an increase in the grain harvest and a large number of consumers," HIB director Robert Brovdi said.


According to the latest official forecast, Ukraine is likely to boost its harvest up to 51 million tonnes from 39.2 million in 2010 and Brovdi said a high crop would allow exports of up to 20 million tonnes in 2011/12.


Ukraine cut exports to 12.7 million tonnes in 2010/11 from 21.5 million in 2009/10 after the government imposed export quotas in a bid to prevent a rise in domestic bread prices due to a fall in the harvest after heavy rains followed by drought and a jump in global prices.


Brovdi said that feed grain would dominate Ukrainian exports this season due to poor weather across the former Soviet republic. Milling wheat, he said, would be mostly consumed in Ukraine.


"The share of milling wheat is falling in favour of feed wheat. Feed wheat, barley and corn would form three main parts of the exports," he said, adding that feed wheat would make up 60-65% of the total wheat harvest in 2011.


In 2010, the share of feed wheat did not exceed 45%.


"Feed grain will be the major trade trend this year. Excess supply of feed grain would cause a fall in prices abroad and in Ukraine," he said.


Brovdi said current domestic prices for Ukrainian feed grains were too high and exporters faced difficulties in selling the grain to foreign consumers.


He also added that Ukraine would face tough competition from Russia which had large grain stocks from the previous season and expected a bumper harvest of 90 million tonnes in 2011, a strong rebound from last year when the drought slashed yields.


Ukraine has already felt pressure from Russian grain sales and in July, Ukrainian grain exports dropped 81% to 334,000 tonnes from 1.786 million in June.

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